Sale of primary / second home

Forum|Forum|2 years ago
February 15, 2024
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In 2006, my wife's parents put their home in her name and her brother's name 50/50. Both of their parents have passed, with the most recent passing of her father. Ultimately, the home was sold in 2023 by owner at a loss. The home was sold for $40,000. It was the brother's primary residence and my wife has her own primary home. My wife and her brother were each paid $20,000. I am having trouble in regards to what we have to file or claim due to this situation. Do we have to report the $20,000 for sale of a second home and does her brother file as primary home? Also, does it matter the home was sold well below market value? Any assistance with this would be greatly appreciated. Thank you!

Bsch4477

Employee

Your wife’s cost basis is the value of the home when she first owned it in 2006. Her gain or loss is the difference between that amount and the $20,000 she received. A realtor might be able to give you a reasonable historical value.